Driven by this sort of rhetoric, a conviction has taken hold among many conservatives that the president is actively hostile to the very idea of a market-based economy. That’s a much different charge than the one Obama seemed likely to face just a few months ago - not that he was too hostile to capitalism, but that he was too accommodating of it. Obama’s indulgence toward the big Wall Street banks after the financial crisis once appeared to be his greatest vulnerability. Some Democrats in Congress can even pinpoint the date on which they believe the American public turned against them and the president, driven by disgust over Wall Street’s unchecked excesses. It was March 15, 2009, when the news broke that executives at AIG would receive millions of dollars in bonuses.
For Obama, the danger of this latter, now mostly forgotten, line of attack is that unlike the current one, it is true: He took a hands-off approach to the banks as part of a larger strategy to stem the crisis, a choice that he has never been very good at explaining, and thus has the potential to hurt him. His administration’s strategy depended on private markets, rather than on the government, and entailed propping up the same banks that had wrought the damage.
When the administration came into office, the economy was shrinking at frightening speed. Treasury Secretary Timothy Geithner and several of his colleagues had dealt with the financial crises in Mexico and Asian during the 1990s and believed they knew how best to stop this one. Along with fiscal stimulus and looser monetary policy, they considered it imperative to recapitalize the banking sector and get it lending again.
